State aid: Commission investigates potential state aid at Carcassonne airport in France

Brussels, 4 April 2012 – The European Commission has opened an in-depth investigation to assess whether financial arrangements between public authorities and the airport of Carcassonne (France), as well as rebates and marketing agreements concluded between this airport and the airline Ryanair, are in line with EU state aid rules. The opening of proceedings gives interested third parties an opportunity to submit comments on the measures under assessment; it does not prejudge the outcome of the investigation.

Carcassonne (CCF) is a regional airport in Aude (Languedoc-Roussillon region), with a total traffic of 392 465 passengers in 2010. The airport is owned by the Languedoc-Roussillon region and was operated by the local Chamber of Commerce (CoC) until May 2011. The operation of the airport was then awarded to Veolia Transport through a tendering procedure.

The CoC received subsidies of at least €11 million between 2000 and 2010 from various public bodies (notably the region, Département de l'Aude and the city of Carcassonne), to finance various infrastructure projects at Carcassonne airport. At this stage, the Commission has doubts whether the measures comply with the 2005 EU guidelines on state aid in the aviation sector. In particular, the Commission will check whether the subsidies were necessary to carry out the investment, whether the aid was proportionate to the objectives pursued and whether the infrastructure had satisfactory medium-term prospects for use.

The CoC also benefited between 2001 and 2011 from a range of support measures including subsidies of more than €8 million for its activity as operator of Carcassonne airport, as well as cash advances. The Commission considers at this stage that these support measures merely cover ordinary business expenses and may therefore constitute operating support in breach of EU state aid rules.

Moreover, Veolia Transport, operator of the airport since May 2011, has been granted public subsidies linked to the number of routes operated from Carcassonne airport. The airport owner, the Languedoc-Roussillon region, has also pledged to finance several infrastructure investments linked to the commercial activity at the airport (e.g. aprons for commercial aircrafts), which will be used by the airport operator free of charge. The Commission has doubts whether these measures are in line with EU state aid rules.

Finally, the Commission will examine whether agreements between the airport operators and Ryanair, such as marketing support contracts and discounts on airport charges, would have been contracted by a market economy investor. The Commission has concerns that such arrangements could give the airline, sole commercial user of the airport, an undue economic advantage that its competitors do not enjoy.

Investments by public authorities into companies carrying out economic activities are in line with EU state aid rules when they are made on terms that a private player operating under market conditions would accept (the market economy investor principle, MEIP). In the aviation sector, infrastructure investment subsidies can in principle be found compatible with the 2005 guidelines on state aid in the aviation sector when they are necessary, proportionate, pursue an objective of general interest, ensure non-discriminatory access for all users and do not unduly affect trade in the internal market. Operating support is far more likely to distort competition between airports and is therefore in principle incompatible with the internal market.

In 2012 the Commission plans to revise its guidelines on aviation – covering both airlines and the financing of airport infrastructure – following a public consultation.

The non-confidential version of the decision will be made available under the case numberSA.33962 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.